BSE to launch cross currency derivatives and cross INR options with effect from 27th February 2018

BSE has received SEBI approval for introducing cross currency derivatives (future and options) on pairs such as Euro (EUR)-US Dollar (USD), Pound Sterling (GBP)- USD and USD-Japanese Yen (JPY). The exchange has also received permission to introduce option on EUR-INR. GBP-INR and JPY-INR in addition to existing USD-INR Options. Additionally, the regulator
has also allowed trading in cross-currency derivatives contracts for a longer period between 9:00 AM and 7:30 PM.

Currently futures contracts are available only for currency pairs that have the rupee as one leg and an options contract for only a single currency pair—dollar/rupee—is available.

For futures contracts in cross-currencies, 12 standardized monthly contracts will be made available to investors and the contracts will be settled in cash (rupees). In options contracts, three serial monthly contracts followed by three quarterly contracts will be launched. The last trading day for the contracts shall be two working days prior to the last working day of the expiry month at 12:30 p.m and the final settlement price of the cross-currency derivatives contracts shall be computed using the RBI (Reserve Bank of India) reference rate for USD-INR and the corresponding exchange rate published by RBI for EUR-INR, GBP-INR and JPY-INR, as applicable, on the last trading day of the contract.

The size of the these contract will be (i) EUR-USD: EUR 1,000 (ii) GBP-USD: GBP 1,000 (iii) USD-JPY: USD 1,000

Ashishkumar Chauhan, MD&amp;CEO, BSE said, “The introduction of new products will allow entities like corporates, foreign portfolio investors and non-resident Indians to participate and to take positions in the exchange traded currency derivatives markets. Besides, a longer trading session will enable market participants to capture key global events in pricing which they otherwise lose out”.